I would say lease it for 36 months don't put 14k down but maybe 3000 cap cost reduction to get the monthly payments still within reach. Invest the other 11k that would make up some of the interest from the residual

from talking to a few dealers, it sounds like the money factor for the lease is way high. Also, if you put a bunch of money down on the lease its kind of wasted- all you're really doing is lowering the payment down by $20+/- bucks a month. I'd rather keep that money and make a higher monthly payment.
on a lease my dealer told me 1360 month with 5k down for 3 years. but to buy it was 1530 zero down including taxes and fees for 5 years- that was with a 7.1 loan rate. It was weird, he also said I could get it for $1215month with 15k down. I think the lease rates are a little whack right now. I was hoping for around a thousand with 5k down or less. But if I was getting the car now I'd look to buy. Even if you sell you'll get a decent amount in 2-3 years.

Well, call me a heretic, but for these rates I would definately consider looking elsewhere, maybe at a a 335, S5 or even a CTS-V, if you know what I mean.

If you buy/finance vs lease, it does not matter what car you get. Price paid is all that matters. The rate would be the same for any vehicle assuming a dealer is not running their own finance promotion lower than what you can get.

Plus, he already has ordered the car and is just deciding how to pay for it.

I would say lease it for 36 months don't put 14k down but maybe 3000 cap cost reduction to get the monthly payments still within reach. Invest the other 11k that would make up some of the interest from the residual

+1

Put down as little as possible and save/invest the balance

Why only two or three years??...this car will be as fun to drive in 5 yrs as today...the E46 still thrills...plus you can aftermarket with no concerns if you buy

Sorry for the confusion...i see where my post seems to make no sense...

If he only wants the car for 2 or 3 years...lease, but he should hold onto his cash and make a small down payment

The second part of my post is argueing for purchase...I am purchasing mine because I think the car will still have value to me in 5 years...and I am not concerned about the depreciation..

Agree. I figured you missed his desire to only have the car 2-3 years.

My advice still is that if you think 2-4 years is how long you will want the car, than either leasing or financing makes sense depending on which has the best rates and what risk/hassle you are willing to take. I would recommend the OP put as little down as he can to obtain a loan around 5%. The lease factors suck!

The other thing I am wondering about... since they set the residual so low on the early M3s, wouldn't it make some sense to private sale the car at the end of the lease for more than what I would owe?

I could get the benefits of leasing (lower monthly payment) with less out of pocket, while still making some money back at the end doing a private sale. And if the bank was right and the depreciation is as bad as they claim it will be and I can't sell it... well, then, it's not my problem and i just hand the keys to my dealer.

The other thing I am wondering about... since they set the residual so low on the early M3s, wouldn't it make some sense to private sale the car at the end of the lease for more than what I would owe?

I could get the benefits of leasing (lower monthly payment) with less out of pocket, while still making some money back at the end doing a private sale. And if the bank was right and the depreciation is as bad as they claim it will be and I can't sell it... well, then, it's not my problem and i just hand the keys to my dealer.

that exactlyyyyy what i was thinking...im glad im not alone...its sort of a win win....you start lookin to sell a month or two before your lease is up...if you can come up a good 5 or even 10 grand why not? if not your right just go ahead and drop the keys off at the dealer....I mean you can easilyy get 40 to 45 after 3 years...cuz ive been lookin at e46 m3's and ive seen 4 or 5 year old models selling for 35 to 38 thousand range...and the e46 isnt even a 70 thousand dollar car...